Hemant Surgical Industries Ltd Auditor Reports

INDEPENDENT AUDITORS’ REPORT ON RESTATED FINANCIAL INFORMATION

To

The Board of Directors

HEMANT SURGICAL INDUSTRIES LIMITED

502, 5th Floor, ECSTASY,

City of Joy Commercial,

JSD Road, Mulund West,

Mumbai - 400080

Dear Sirs,

1. We have examined the attached restated financial statements of assets and liabilities of Hemant Surgical Industries Limited, (hereinafter referred to as "the Company") as at March 31, 2023, 2022 and 2021 restated summary statement of profit and loss, restated summary statement of Cash Flows Statement for the period ended on as at March 31, 2023, 2022 and 2021, the Summary Statement of Significant Accounting Policies, the Notes and Annexures as forming part of these Restated Financial Statements (collectively referred to as the " restated summary statements" or "restated financial statements") annexed to this report and initialled by us for identification purposes. These restated financial statements have been prepared by the management of the Company and approved by the Board of Directors of the company in connection with its proposed SME Initial Public Offer of equity shares ("SME IPO") on relevant stock exchange.

2. These restated summary statements have been prepared in accordance with the requirements of:

(i) sub-clauses (i) and (iii) of clause (b) of sub-section (1) of section 26 of the Companies Act, 2013 ("the Act") read with Companies (Prospectus and Allotment of Securities) Rules 2014;

(ii) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations 2018, as amended ("ICDR Regulations") and related amendments / clarifications from time to time issued by the Securities and Exchange Board of India ("SEBI")

(iii) The Guidance Note on Reports in Company Prospectus (Revised 2019) issued by the Institute of Chartered Accountants of India ("ICAI"), as amended from time to time (the "Guidance Note")

3. The Companys Board of Directors is responsible for the preparation of the Restated Financial Information for the purpose of inclusion in the Draft Offer Document/ Offer Document to be filed with Securities and Exchange Board of India, relevant stock exchange and Registrar of Companies, Mumbai in connection with the proposed SME IPO. The Restated Financial Information has been prepared by the management of the Company on the basis of preparation stated in Annexure IV of the Restated Financial Information. The Board of Directors responsibility includes designing implementing and maintaining adequate internal control relevant to the preparation and presentation of the Restated Financial Information. The Board of Directors is also responsible for identifying and ensuring that the Company complies with the Companies Act, (ICDR) Regulations and the Guidance Note.

4. We, M/s A D V & Associates Chartered Accountants have been subjected to the peer review process of the Institute of Chartered Accountants of India (ICAI) and holds the peer review certificate dated 25 January, 2022 valid till 31 January, 2025. We confirm that there is no express refusal by the peer review board of ICAI to renew the certificate and the process to renew the peer review certificate has been initiated by us.

5. We have examined such restated financial statements taking into consideration:

(i) The terms of reference and terms of our engagement agreed upon with you in accordance with our letter dated September 12, 2022 in connection with the Draft Offer Document/ Offer Document being issued by the Company for its proposed Initial Public Offering of equity shares on relevant stock exchange ("IPO" or "SME IPO"); and

(ii) The Guidance Note on Reports in Company Prospectus (Revised) issued by the Institute of Chartered Accountants of India ("Guidance Note"). The Guidance Note also requires that we comply with the ethical requirements of the Code of Ethics issued by the ICAI.

(iii) Concepts of test checks and materiality to obtain reasonable assurance based on verification of evidence supporting the Restated Financial Information; and

(iv) The requirements of Section 26 of the Act and the ICDR Regulations. Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance with the Act, the ICDR Regulations and the Guidance Note in connection with the IPO.

6. These Restated Financial Statements of the Company have been extracted by the management from the audited financial statements of the Company for the period ended on as at March 31,2023, 2022 and 2021 which has been approved by the Board of Directors. The Opening Balance of Reserve and Surplus has been extracted from the Closing Balance of Reserve and Surplus from Restated Financials of 2019-20 of the Company.

7. Based on our examination, we are of the opinion that the restated financial statements have been prepared:

a) Using consistent accounting policies for all the reporting periods.

b) Adjustments for prior period and other material amounts in the respective financial years to which they relate.

c) There are no extra-ordinary items other than those appearing in financials that need to be disclosed separately in the accounts and requiring adjustments.

d) There are no audit qualifications in the audit reports issued by the statutory auditor for the period ended March 31,2023, 2022 and 2021 which would require adjustments in these restated financial statements of the Company.

8. Audit for the period ended March 31, 2023 and 2022 was conducted by us, whereas audit for March 2021 was conducted by Vijay V. Dedhiya & Co. The financial report included for these periods is based solely on the report submitted by Vijay V Dedhiya & Co. for March 2021. Further financial statements for period ended on March 31, 2023 and March 31, 2022 have been reaudited by us as per the relevant guidelines.

9. We have also examined the following other financial information relating to the Company prepared by the Management and as approved by the Board of Directors of the Company and annexed to this report relating to the Company for the period ended on March 31, 2023, 2022 and 2021 proposed to be included in the Draft Offer Document/ Offer Document.

Annexure to restated financial statements of the Company:-

1. Summary statement of assets and liabilities, as restated as appearing in ANNEXURE I;

2. Summary statement of profit and loss, as restated as appearing in ANNEXURE II;

3. Summary statement of cash flow as restated as appearing in ANNEXURE III;

4. Restated significant accounting policies and notes to accounts as appearing in ANNEXURE IV;

5. Share capital as restated as appearing in ANNEXURE V to this report;

6. Reserves and surplus as restated as appearing in ANNEXURE VI to this report;

7. Long-term borrowings as restated as appearing in ANNEXURE VII to this report;

8. Deferred tax asset/liability as restated as per ANNEXURE VIII to this report;

9. Long-term provisions as restated as appearing in ANNEXURE IX to this report;

10. Short-term borrowings as restated as appearing in ANNEXURE X to this report;

11. Trade payables as restated as appearing in ANNEXURE XI to this report;

12. Other current liabilities as restated as appearing in ANNEXURE XII to this report;

13. Short-term provisions as restated as appearing in ANNEXURE XIII to this report;

14. Property, Plant & Equipment as restated as appearing in ANNEXURE XIV to this report;

15. Non-current investment as restated as appearing in ANNEXURE XV to this report;

16. Long-term loans and advances as restated as appearing in ANNEXURE XVI to this report;

17. Inventories as restated as appearing in ANNEXURE XVII to this report;

18. Trade receivables as restated as appearing in ANNEXURE XVIII to this report;

19. Cash & cash equivalents as restated as appearing in ANNEXURE XIX to this report;

20. Short-term loans & advances as restated as appearing in ANNEXURE XX to this report;

21. Other current assets as restated as appearing in ANNEXURE XXI to this report;

22. Revenue from operations as restated as appearing in ANNEXURE XXII to this report;

23. Other income as restated as appearing in ANNEXURE XXIII to this report;

24. Raw material Consumed as restated as appearing in ANNEXURE XXIV to this report;

25. Change in inventories of finished goods as restated as appearing in ANNEXURE XXV to this report;

26. Employees benefit expenses as restated as appearing in ANNEXURE XXVI to this report;

27. Finance cost as restated as appearing in ANNEXURE XXVII to this report;

28. Depreciation as restated as appearing in ANNEXURE XXVIII to this report;

29. Other expenses as restated as appearing in ANNEXURE XXIX to this report;

30. Contingent liabilities as restated as appearing in ANNEXURE XXX to this report;

31. Related party transactions as restated as appearing in ANNEXURE XXXI to this report;

32. Tax shelter as restated as appearing in ANNEXURE XXXII to this report;

33. Capitalisation statement as at March 31, 2023 as restated as appearing in ANNEXURE XXXIIII to this report;

10. Statement of accounting ratios & additional Information as restated as appearing in ANNEXURE XXXIV to this report,

11. The report should not in any way be construed as a re-issuance or re-dating of any of the previous audit reports issued by any other firm of chartered accountants nor should this report be construed as a new opinion on any of the financial statements referred to therein.

12. We have no responsibility to update our report for events and circumstances occurring after the date of the report.

13. In our opinion, the above financial information contained in Annexure I to XXXIV of this report read with the respective significant accounting policies and notes to restated summary statements as set out in Annexure IV are prepared after making adjustments and regrouping as considered appropriate and have been prepared in accordance with the Act, ICDR Regulations, Engagement Letter and Guidance Note.

14. Our report is intended solely for use of the Board of Directors for inclusion in the Draft Offer Document/ Offer Document in connection with the SME IPO. Our report should not be used, referred to or adjusted for any other purpose except with our consent in writing. Accordingly, we do not accept or assume any liability or any duty of care for any other purpose or to any other person to whom this report is shown or into whose hands it may come without our prior consent in writing.

For A D V & Associates

Chartered Accountants

Firm Registration no: 128045W

Sd/-

Ankit Rathi

Partner

Membership No.: 162441

UDIN: 23162441BGZGTJ1183

Place: Mumbai

Date: April 28, 2023.